Group Report: Business and Corporation Law - Semester 2, 2024

This report presents a comprehensive analysis of two case studies in business and corporation law. Part A examines a contract law issue concerning misrepresentation in a property purchase, assessing the rights of a buyer (Alex) against the vendor, the city, and the lawyer, considering negligent misrepresentation and fiduciary duty. Part B delves into corporations law, determining the appropriate company type for incorporation, considering the classification of the company in its first year and beyond, and addressing the use of specific words in the company name, referencing ASIC regulations and proprietary company structures. The report applies relevant legal rules and cases to the facts, offering conclusions on the legal positions and implications.

Business and Corporation Law
(Student’s Name)

Part A
Issue
The issue of the case is to check the right of Alex in
against of the vendor, the city of Williamstown and his
lawyer?

• Rules
 In a contract the consent of the parties
should not be influenced by
Misrepresentation.
 Misrepresentation can be understood as
a false statement, which induces the
representee to develop a contract.
 Negligent misrepresentation is a
statement that a party makes without
having proper grounds for belief in its
truth.

• Rules
 Negligent misrepresentation occurs when a
party negligently presents a false statement
to other party and other party believing on
such statement enters into a contract
 For the existence of negligent
misrepresentation, there must be a special
relationship between the parties.
 Further, because of such relationship, the
misrepresentor must owe a fiduciary duty to
misrepresentee.

• Application
 As per the planning certificate attached with
this contract, the land was marked as
medium density.
 After a few months during the usual
searches, Alex ‘s solicitor found a new
planning certificate.
 According to this certificate, the land
purchased by Alex was of a residential zone.
 It means Alex could not develop the 10
apartments on the same by doing
subdivision.

• Concusion
 Alex had right against of the City of
Williamstown only as this council made a
fraudulent misrepresentation.
 The vendor and the solicitor were fair in
their dealings.
 Applying the provisions of Shaddock &
Associates Pty Ltd v Parramatta City
Council, Alex can rescind the contract and
also can ask.

Part B
Issue
The issue of the case is to check and
determine the
 Type of company that should apply to
ASIC in this case
 Category of the company in its first year
of business
 Whether the company will be in the same
category even after 5 years of its working
 Can the company includes words such as
‘Anzac Coffee’ in its name

• Rules
 Mainly two types of companies are there
based on their ownership and
controlling level. Such companies
include proprietary and public
companies.
 Further proprietary company also has
two types, which are Proprietary
companies limited by shares and
unlimited proprietary companies with a
share capital

• Rules
 As per Subsection 3 of section 45A, a
company is termed as a large
proprietary company if the same
breaches 2 or more condition mentioned
above.
 Subsection 5 of the subjective section
says that for the purpose of calculation
of the number of employees, both part-
time and full-time employees will be
included

• Application
.
 After reviewing the fact of the situation, a
proprietary company seems good to be
incorporated as cost of incorporation will also
be less. Further Directors and officers of the
company would have to follow a few
requirements.
 The company is expected to have only 20
employees, gross assets of $5million and
gross revenue of $10 million during its first
financial year.

• Conclusion
 In the next 5 years the assets size,
amount of revenue and number of
employees will be increased which will be
outside of the limit stated under section
45A (2) and therefore the company will
become large proprietary company under
section 45A (3) of the act.
 Moving the discussion towards the name
of the company, this is to say that this
requires prior approval of ASIC.